The prices on the same products always differ in various parts of the world depending on the producer’s expenditures and revenues.
As a rule competition reduces the difference in the prices on the same products to a minimum. Yet, there is some special product in the world. It is gasoline (or petrol as the British call it). The difference in gasoline prices around the world is shocking.
Nowadays an automobile is not an attribute of luxury but a vehicle. Auto manufacturers try to cater for all the social levels, producing both super expensive and super cheap cars. However, after buying an auto the owner has to pay for the fuel to ride it. Fuel is one of the main factors determining the future of the motor industry and the quality of life in a specific country.
So what are the prices on gasoline (petrol) around the world? Experts from various International Associations of Traders and Investors under Masterforex-V Academy have made up the following comparison table of the retail prices on gasoline/petrol:
Why do the prices differ around the world?
As a rule, economists say that gasoline prices depend on:
1. Whether a certain county possesses it own oil fields. Of course if the country exports oil the prices inside the country are lower than in any importing country. That is why in Venezuela 1 liter of 95RON costs $0.016 while in Japan it costs $1.42. The prices cannot be identical.
2. Whether it has its own refineries. If to compare the prices of those countries who has their own oil fields and refineries we get the following interesting picture:
· Venezuela - $0.016
· Turkmenistan - $0.023
· Iran - $0.08
· Kazakhstan - $0.6
· Russia - $0.74
As we can see the difference between Russia and Venezuela is 4600% (between Turkmenistan and Russia 3217%)
3. Whether there is competition between the producers. At first sight everything looks clear as well. The more refineries a country has the tougher the rivalry between them is, resulting in cheaper gasoline. This is what they teach others in universities. However the real situation is far from matching the academic dogmas:
· Turkmenistan - $0.023
· Russia - $0.74
· Canada - $1
So, the second economic dogma fails.
4. The specifics of the country’s external policies. Monopolistic high taxes on fuel guarantee the citizens’ high quality of life. Economists usually site Norway as an example. It refines oil while 1 litter of gasoline (petrol) costs $2,7. Let’s follow their logics:
· USA - $0.75
· Russia- $0.74
· Uzbekistan – $0.86
The prices are almost the same but the quality of life differs dramatically.
1. The cheapest gasoline (petrol) can be bought in countries with “dictatorial” governments: Venezuela, Turkmenistan, Iran etc. Why? Economists explain: it happens because these countries are big-scale exporters of oil but have poor quality of life. So in order to make up for it and reduce the public dissatisfaction they artificially lower the fuel prices, Western analytics explain. In Turkmenistan 1 liter of 95RON costs 2.3cents, in Venezuela – 1.6cents, in Iran – 8 cents. In other Arab countries the prices varies around 10 cents per liter. The most expensive gasoline (in connection with high taxes) in Germany, Iceland, Turkey, Norway.
Gasoline (petrol) prices on 92RON in the CIS countries: the cheapest ones are in Turkmenistan (2 cents per liter) and Azerbaijan (46 cents). Kazakhstan comes 3rd (56 cents for 1liter of 92RON). Then follows Russia with 67 cents. Tajikistan has recently seen an increase in the prices on fuel, resulting in 80 cents per liter of 92RON. The situation in Uzbekistan is almost the same – 83 cents a liter.
In Belarus there was a series of price growth caused by the problems with the prices of Russian crude oil. Now 1 liter of 92 RON costs 91 cents. Dmitri Frantsevich, the head of the Belarusian Association of Traders and Investors under Masterforex-V Academy, reports that the price on fuel is identical at all the fuel stations around the country. It is connected with governmental monopoly on all types of fuel and its strict control over the prices on gasoline.
Armenia has similar problems. Gasoline is constantly growing in price. Today 1 liter costs 96 cents, while in Ukraine the price is 99 cents.
The most expensive gasoline is in Moldova – about $1.14. As the result of disputes with Russia, Moldova gets crude oil at world prices.
So, on the example of the CIS states we can see that gas prices are growing around the world. It is mainly connected with the increase in crude oil prices.
Will gasoline market see further uptrend?
Analysts from the Department of Market Sentiments, Masterofrex-V Academy, suppose that it mainly depends on the world oil prices as from May till November 2010 the market prices on gasoline were moving within the $1.9 - 2.2 range. Only on Nov 10th (bar A) there was the 1st serious effort made to come out of the range in the upward direction. Increased trading volumes at normal spreads and the bar closed at the top testify to this. The next bar has a very low volume. We can conclude that the market participants do not expect the price to fall below $2.1. Bar B represents strength as it is closed at the top and has above-the--average trading volumes with widened spreads but without the lower shadow. By now the price has come close to the resistance level at $2.2, probably getting ready to break through it.
Short positions (sales) should definitely be avoided. Look for buys at the signs of strength. In order to make an upswing the price needs to settle above $2.2, and it is desirable that the volume at the breakout should be higher or equal to the volume of bar A. It will testify to the fact that the breakout is genuine. The optimal choice is to enter at updating the current high $2.26, supported by trading volume. The closest objective is $2.44.
The strong correlation between oil and gasoline should also be kept in mind and used as an extra sign to confirm or disprove your suppositions.
Market Leader offers you to participate in a survey by asking the following question: What are the main factors determining the difference in gasoline prices around the world?
· Economic factors
· Politicians and oil oligarchs
You are free to discuss this article here: forum for traders and investors
No comments:
Post a Comment